StartupCFO : Mark MacLeodhttp://www.startupcfo.ca
A blog on funding, growing and exiting startupsTue, 25 Oct 2016 22:48:22 +0000en-UShourly1https://wordpress.org/?v=4.7.9Startupcfohttps://feedburner.google.comHitting Pause on StartupCFOhttp://feedproxy.google.com/~r/Startupcfo/~3/V5OgLt1ioYQ/
http://www.startupcfo.ca/2016/10/hitting-pause-startupcfo/#commentsTue, 25 Oct 2016 22:48:22 +0000http://www.startupcfo.ca/?p=3067In February 2007, I signed up for a blogger account and wrote my first post here. I had no grand intentions when I started. I like to write and I was curious about blogging. Almost 10 years and 700 posts later, this blog has served me well. When I started this, there were few people … Continue reading Hitting Pause on StartupCFO

]]>In February 2007, I signed up for a blogger account and wrote my first post here. I had no grand intentions when I started. I like to write and I was curious about blogging.

Almost 10 years and 700 posts later, this blog has served me well. When I started this, there were few people writing about startup finance, modelling, metrics, fundraising, etc. Other than some early adopter such as Fred and Brad, most investors had not yet caught on to the power of blogging to build their brands and deal flow.

As I look back, some of my most important relationships came from people who started out as readers here. This includes FreshBooks and Shopify. In both cases the CEOs reached out to chat after reading what I had to say.

Despite my twitter handle, I’m no longer a startup CFO. It feels kind of weird to be writing a blog of the same name. So, I’m hitting the pause button on this blog. No more posts. I will keep it up and running as there’s some good stuff buried in the archives.

Still writing…

As I mentioned before, I love to write. The process of distilling my thoughts on a subject into something concise and usable is a learning process for me. It clarifies my thinking and helps me get better. I couldn’t imagine not writing anymore.

I launched SurePath Capital Partners last year. We help companies raise growth capital and exit. We serve SaaS, e-commerce and marketplace companies and have a deep focus on companies serving the global SMB market.

We share our insights on SaaS and SMB regularly in our library. Those insights go out to a large list of CEOs, investors and corporate development professionals every month. I will still be writing there regularly

Introducing Real Exits

In addition to our library, I’m pleased to introduce a new publication today: Real Exits. Over the years, I have noticed that the vast majority of exits are sub $100m outcomes. The tech press universally covers the big ones. But they’re not real. Only 3% of the SaaS exits that happened in North America in the last 2 years were north of $100M.

I truly hope you are building the next Shopify or next Hubspot. But the odds are against you. If you make it to an exit, chances are it will be a smaller one. I call those Real Exits.

After almost 2 decade apprenticing as a CFO and VC, I have now dedicated myself to helping companies raise the capital needed to go for the massive (and rare outcomes) or be in a position to achieve a profitable and very real exit.

I hope you will follow along with this new publication as we explore how to make exits happen for your business.

]]>http://www.startupcfo.ca/2016/10/hitting-pause-startupcfo/feed/6http://www.startupcfo.ca/2016/10/hitting-pause-startupcfo/Exits in Canada: September 2016http://feedproxy.google.com/~r/Startupcfo/~3/E97wUAr1DQQ/
http://www.startupcfo.ca/2016/10/exits-in-canada-september-2016/#respondMon, 03 Oct 2016 21:07:02 +0000http://www.startupcfo.ca/?p=3061After a slow Summer, Canadian IT exits picked up last month with 10 deals closed. Here are the highlights for the closed deals last month: 10 deals closed (5 last month) 3 of the deals had a disclosed value. The largest was SMART Technologies’ $55M USD sale to Foxconn Technology Group. The companies were across Canada: 5 from Vancouver (and Victoria), 3 from … Continue reading Exits in Canada: September 2016

]]>http://www.startupcfo.ca/2016/10/exits-in-canada-september-2016/feed/0http://www.startupcfo.ca/2016/10/exits-in-canada-september-2016/European SaaS Exits – my talk from SaaStockhttp://feedproxy.google.com/~r/Startupcfo/~3/ut8DESB0eKM/
http://www.startupcfo.ca/2016/09/european-saas-exits-my-talk-from-saastock/#respondThu, 22 Sep 2016 23:44:11 +0000http://www.startupcfo.ca/?p=3057 The inaugural SaaStock event took place in Dublin today. For a first time event, it was extremely high quality. Great speakers from both sides of the Atlantic sharing deep, actionable insights on succeeding in SaaS. I gave a talk on achieving meaningful SaaS exits. I looked at actual data on SaaS exits then moved … Continue reading European SaaS Exits – my talk from SaaStock

The inaugural SaaStock event took place in Dublin today. For a first time event, it was extremely high quality. Great speakers from both sides of the Atlantic sharing deep, actionable insights on succeeding in SaaS.

I gave a talk on achieving meaningful SaaS exits. I looked at actual data on SaaS exits then moved on to general tips for generating meaningful exits no matter where your business is.

]]>http://www.startupcfo.ca/2016/09/european-saas-exits-my-talk-from-saastock/feed/0http://www.startupcfo.ca/2016/09/european-saas-exits-my-talk-from-saastock/Why you need to goto SaaStockhttp://feedproxy.google.com/~r/Startupcfo/~3/zJAaWmpXbTY/
http://www.startupcfo.ca/2016/09/why-you-need-to-goto-saastock/#respondFri, 09 Sep 2016 15:42:16 +0000http://www.startupcfo.ca/?p=3051In a couple of weeks I’ll be crossing the Atlantic to speak about SaaS exits at the inaugural SaaStock event in Dublin, Ireland. This promises to be an amazing event. Here’s why: The people: The event is 100% focused on SaaS operators, investors and advisors. It’s super-focused. If you’re running a SaaS business, everyone you … Continue reading Why you need to goto SaaStock

In a couple of weeks I’ll be crossing the Atlantic to speak about SaaS exits at the inaugural SaaStock event in Dublin, Ireland. This promises to be an amazing event. Here’s why:

The people: The event is 100% focused on SaaS operators, investors and advisors. It’s super-focused. If you’re running a SaaS business, everyone you would ever want to speak with will be there.

The speakers: For an inaugural event, I’m blown away by the speakers. Over 40 great people from both sides of the Atlantic are involved. Some of the best SaaS investors and most accomplished SaaS operators will be sharing their insights.

Access: Imagine SaaStr before it blew up with 10,000 people. The organizers for SaaStock are expecting ~ 700 high quality people. That’s a great opportunity to get to know people that matter.

Guinness: Of course, going to Dublin means you need to have some of that tasty, dark beer.

]]>http://www.startupcfo.ca/2016/09/why-you-need-to-goto-saastock/feed/0http://www.startupcfo.ca/2016/09/why-you-need-to-goto-saastock/When to ask for annual prepaymenthttp://feedproxy.google.com/~r/Startupcfo/~3/5Lsw55TsAvw/
http://www.startupcfo.ca/2016/09/when-to-ask-for-annual-prepayment/#respondWed, 07 Sep 2016 11:57:14 +0000http://www.startupcfo.ca/?p=3046When I am talking with SaaS founders the discussion frequently turns to the pros and cons of asking customers to prepay their subscription annually. Often the decision to do this is driven by a desire to improve conversion rates. I think this is mistaken. As far as I’m concerned a customer that is willing to prepay … Continue reading When to ask for annual prepayment

When I am talking with SaaS founders the discussion frequently turns to the pros and cons of asking customers to prepay their subscription annually. Often the decision to do this is driven by a desire to improve conversion rates. I think this is mistaken.

As far as I’m concerned a customer that is willing to prepay for an entire year was going to convert anyway. And in terms of renewals, offering a prepay discount to a renewing customer won’t keep them if they were planning to leave anyway.

So, annual prepayments should not be done to improve conversion and retention rates.

If that’s the case, then when should you offer annual prepayments?

At the very early stages, a successful annual prepayment offer is a great way to test product-market fit. If you have not built the right product for the right customer, they won’t prepay.

At all stages, annual prepayments fill the cash void. With a SaaS business model, you pay to acquire the customer on day 1 and only recover that acquisition cost over time as you collect subscriptions. So, your ability to grow is limited by your ability to fund that cash gap.

When you get paid upfront, there is no cash gap unless your acquisition cost is greater than one year’s subscription revenue. I don’t usually recommend such aggressive customer acquisition spend until a company is in to the growth stage and is presumably well funded and has enough history in it’s unit economics and acquisition channels to be confident about investing aggressively in growth.

]]>http://www.startupcfo.ca/2016/09/when-to-ask-for-annual-prepayment/feed/0http://www.startupcfo.ca/2016/09/when-to-ask-for-annual-prepayment/Exits in Canada: August 2016http://feedproxy.google.com/~r/Startupcfo/~3/HvERP9i7cog/
http://www.startupcfo.ca/2016/09/exits-in-canada-august-2016/#respondThu, 01 Sep 2016 11:27:45 +0000http://www.startupcfo.ca/?p=3043As expected given the time of year, August was a slow month for IT exits in Canada with 5 deals closed (3 last month). However, an additional 5 deals were announced in the month (but not closed yet) including BCE’s purchase of Q9 Networks for $ 491M USD. So, perhaps that’s a good sign as we … Continue reading Exits in Canada: August 2016

As expected given the time of year, August was a slow month for IT exits in Canada with 5 deals closed (3 last month). However, an additional 5 deals were announced in the month (but not closed yet) including BCE’s purchase of Q9 Networks for $ 491M USD. So, perhaps that’s a good sign as we all get back to work.

Here are the highlights for the closed deals last month:

5 deals closed (3 last month)

1 of the deals had a disclosed value ($ 13.2M).

The companies were across Canada: Halifax, Saint Lazare, Toronto, Edmonton and Vancouver

None of the companies were VC-backed (3rd month in a row for this)

3 buyers were Canadian, 2 were from the US

2 of the buyers were public

Median time to exit: 10.5 years (19 years for last months’ deals)

Shortest time to exit: 6 years

Longest time to exit: 14 years

All of the buyers were strategic.

As always, I report on these each month. If you’re interested in seeing the underlying data, I keep it here.

]]>http://www.startupcfo.ca/2016/09/exits-in-canada-august-2016/feed/0http://www.startupcfo.ca/2016/09/exits-in-canada-august-2016/Driving company performance: What are you settling for?http://feedproxy.google.com/~r/Startupcfo/~3/-fwNQQozCDY/
http://www.startupcfo.ca/2016/08/what-are-you-settling-for/#commentsTue, 09 Aug 2016 16:06:44 +0000http://www.startupcfo.ca/?p=3038I was with one of my CEOs this morning. As we walked through the highs and lows of his business I made a suggestion that I want to pass on. Nothing’s ever perfect in a startup, or life for that matter. Perfection is an illusion. However, on the startup journey the bulk of value gets … Continue reading Driving company performance: What are you settling for?

I was with one of my CEOs this morning. As we walked through the highs and lows of his business I made a suggestion that I want to pass on.

Nothing’s ever perfect in a startup, or life for that matter. Perfection is an illusion. However, on the startup journey the bulk of value gets created once everything starts to work.

The way to get to that promised land of momentum is through thousands of little things. Decisions and improvements, big and small, that you and your team make every day.

Most startups burn money. As a result, time is not on our side. Each day and week matter as we figure out how to make our companies work.

With all that context in mind, here’s my suggestion:

As leaders, it’s easy to get caught up in all the activity that’s going on. We see all that activity and are happy that things are moving forward. But I guarantee you, no matter how much progress you’re making and how hard everyone is working, you are making compromises. You’re settling.

Maybe you have a good sales leader, but not a great one. Maybe you know you have a conversion issue, but you keep allowing that to go on without diagnosis and a plan. The list of examples is endless.

I recommend that CEOs take some time each week to reflect on the business and ask themselves ‘where am I settling for good instead of pushing for great‘?

Even in my small advisory firm I do this weekly. I don’t allow meetings after 4pm Fridays. I take that time to revisit the whole week. I look at where I have settled. I use that to learn, grow and accelerate.

If you do this each and every week, mobilize your insights and push for improvements, you will be amazed at how much your entire company will level up.

]]>http://www.startupcfo.ca/2016/08/what-are-you-settling-for/feed/2http://www.startupcfo.ca/2016/08/what-are-you-settling-for/Exits in Canada: July 2016http://feedproxy.google.com/~r/Startupcfo/~3/hEr-NGIgqps/
http://www.startupcfo.ca/2016/08/exits-in-canada-july-2016/#respondTue, 02 Aug 2016 14:02:49 +0000http://www.startupcfo.ca/?p=3032I expected a Summer slow down, but July was pretty darn underwhelming with just 3 software acquisitions in Canada. Highlights: 3 deals announced (8 last month) 1 of the deals had a disclosed value ($ 4.1M). The companies were in Burlington, Montreal and Quebec City None of the companies were VC-backed (2nd month in a row for this) 1 buyer was Canadian, 1 US, and 1 … Continue reading Exits in Canada: July 2016

]]>http://www.startupcfo.ca/2016/08/exits-in-canada-july-2016/feed/0http://www.startupcfo.ca/2016/08/exits-in-canada-july-2016/7 lessons from the Dollar Shave Club Acquisitionhttp://feedproxy.google.com/~r/Startupcfo/~3/UkGw510G_8Q/
http://www.startupcfo.ca/2016/07/7-lessons-from-the-dollar-shave-club-acquisition/#commentsWed, 27 Jul 2016 02:01:47 +0000http://www.startupcfo.ca/?p=3027The big news in the e-commerce World this week is Unilever’s purchase of Dollar Shave Club (DSC) for a cool $1B (cue the Dr. Evil laugh). The simplest of ideas has gone from start to $1B in 5 years. This at a time when e-commerce has been going through ups and downs. E-commerce is one of … Continue reading 7 lessons from the Dollar Shave Club Acquisition

The simplest of ideas has gone from start to $1B in 5 years. This at a time when e-commerce has been going through ups and downs.

E-commerce is one of our three focus areas at SurePath. So, we have followed this company with interest. Here are my top 7 lessons from this runaway success. Some of them are counter to prevailing investor wisdom and how to win in e-ecommerce.

1. Start with a simple, killer value proposition

Razor blades delivered to your door every month for $1. It doesn’t get simpler than that. As a guy, I get it. When I first saw their cheeky intro video I wanted to sign up immediately (of course, they didn’t ship to Canada). Buying razor blades the old school way is a rip off. DSC knew that and exploited it.

2. Your business need not be defensible as long as it’s scaling like c#$p

Anyone with access to supply, a website and some moxy could have started this business. Once the idea was validated, anyone (including incumbents – if they were willing to disrupt their existing ridiculously high margin business), could have entered the market.

Great execution fueled by strong demand kept DSC in the lead. Traction forgives all sins – including the complete and utter lack of barriers to entry for competition (apparently).

3. Yes, you can compete with Amazon

Conventional wisdom says it’s a bad idea to compete with Amazon. Most of the time that’s true. Amazon sells blades along with tons of other consumer packaged goods. Yet, that didn’t bother DSC one bit.

4. E-commerce is a business of scale

When you operate on low margins (generally the case for resale of 3rd party goods, especially so for basic consumer goods), and you need to find customers online – you need lots of customers to make the math work. DSC raised $160M and scaled to 120 employees on its way to $1B.

5. Technology is everywhere. That means buyers can come from anywhere

Unilever was founded in 1929. It has no e-commerce presence and wasn’t even in this product category. Boom! they put down $1B. This just shows the ability of new businesses and business models to completely disrupt old school incubments. They old folks know this. Expect to see them as more frequent buyers.

]]>http://www.startupcfo.ca/2016/07/7-lessons-from-the-dollar-shave-club-acquisition/feed/4http://www.startupcfo.ca/2016/07/7-lessons-from-the-dollar-shave-club-acquisition/Exits in Canada: June 2016http://feedproxy.google.com/~r/Startupcfo/~3/Fvz3oMXEGGg/
http://www.startupcfo.ca/2016/07/exits-in-canada-june-2016/#respondMon, 04 Jul 2016 21:07:03 +0000http://www.startupcfo.ca/?p=3023June was yet another ‘meh’ month for software acquisitions in Canada. Highlights: 8 deals announced (9 last month) 2 of the deals had a disclosed value (Largest was $ 32.5M). 3 of the companies were in Toronto, 2 in Montreal, the rest were distributed None of the companies were VC-backed 3 of the buyers were Canadian, 3 were from the US, and 1 each for Europe … Continue reading Exits in Canada: June 2016